________ choose the quantities of factors of production to hire and ________ choose the quantities of goods and services to produce
A) Markets; markets
B) Firms; households
C) Factor markets; goods markets
D) Entrepreneurs; firms
E) Firms; firms
E
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Pablo must choose among options A, B, and C. Option A gives him $10,000 for sure. Option B gives him $4,000 with probability 0.5 or $16,000 with probability 0.5. Option C gives him $8,000 with probability 0.5 or $12,000 with probability 0.5
If he receives diminishing marginal utility from wealth, Pablo will A) choose option A. B) choose option B. C) choose option C. D) be indifferent among options A, B, and C.
Why are isoquants negatively sloped?
A) Along a single isoquant, the firm can substitute the use of one input for another while holding the total level of output constant. B) Due to the effects of diseconomies of scale. C) Because the farther the isoquant is from the origin, the higher the level of output. D) Because price and quantity demanded are inversely related.